Bankruptcy Filings Blow Up As Economy Suffers
Layoffs and pay cuts pushed more people into bankruptcy last year, and analysts say that the situation will most likely not improve until the unemployment issue improves. In Wisconsin, bankruptcy filings raised to 30 percent in 2009. This came on top of a 35 percent increase in the preceding year
According to bankruptcy lawyers, it is not just firings and layoffs that are motivation to file. It\’s the losses of once-regular over time pay and full time status that have left consumers from keeping up with monthly payments that in the past were not an issue to pay.
U.S. Bankruptcy Court information shows that there were 27,413 bankruptcy petitions filed in Wisconsin last year. More than 80% were Chapter 7 cases. Chapter 7 cases annihilate medical bills, credit card balances, and other types of debt. Recent Research by The Associated Press illustrated that more than 1.4 million bankruptcies were filed in 2009, an increase of about 32% from 2008.
And despite the fact that bankruptcy takes away the looming debt and offers consumers a fresh financial start, debtors often remain unemployed and are unable to find employment to get a suitableincome again.
Worse still, unless the economy improves enough for companies to start hiring, there is little reason to think that bankruptcies will go down in 2010. Experts have noted that home foreclosures will continue to pile up in 2010 because people who previously had adequate credit have lost employment and cannot keep up with payments.
Bankruptcy might seem like an acceptable option to get a fresh start, but it affects your credit report negatively for ten years, rendering you not able to get a car, place of residence, or employment. Before declaring bankruptcy, it is a wise decision to speak with your creditors and see if some sort of repayment plan can be worked out.
Mallory McGuinness-Hickey is employed by a debt collection agency. Also, she composesarticles on consumer spending, business, finance, and debt collection. Click here to get your own unique version of this article with free reprint rights.